Technology Acceleration: Model and Evidence

This paper investigates the occurrence of 'technology acceleration' across a range of information technologies. The prospect of technology was broached by Gordon Moore of Intel in 1965. His anecdotal 'law' – i.e. performance / price doubles every 18 months – has become received wisdom in many technology industries. Gilder popularized it as Moore’s law and proposed Gilder’s law and a number of such 'laws' reflect underlying social and networking phenomena in research and development. These ‘laws’ appear to hold for long periods of time, and specific technology markets may be characterized by their specific "technology acceleration coefficients". Technology acceleration is related to the broader economic study of what are called hedonic pricing methods, which themselves are approaches to identifying shadow values. The hedonic pricing literature attempts to infer demand for product characteristics (such as performance) from market prices. This research review the hedonic pricing literature for computers, extends the existing literature for a broad range of computers and information technologies, and proposes technology-specific dynamic measures of price-performance change that is robust.